What is your best advice for estate planning with second marriages?
mary elizabeth coleman, ceo, tuckerallen
Despite the happiness that accompanies a second marriage, making practical plans for the future can be complicated. Both parties may have brought separate assets into the marriage and may have children from a previous marriage. Often, the biggest concern the second time around is ensuring that each spouse’s share of the estate ultimately ends up with his or her desired beneficiary. Fortunately, estate planning takes into account your unique family situation.
Some people enter second marriages with grown children and significant assets they wish to keep separate. Other families may have young children from prior relationships and wish to grow their family with additional children and acquire joint assets. No matter what your family structure, my primary advice to people in second marriages is to have an honest conversation with your spouse about your existing finances, goals for the future and how you expect your assets to be distributed. These conversations can be difficult and emotionally charged, but are rewarding in the long run if they preserve family harmony.
If your children are adults, you also may want to include them so that everyone knows what to expect. Hearing the plans from you makes them easier to accept and ultimately follow. Gain control by finding an attorney who specializes exclusively in estate planning and has the experience to help ensure your plan meets your individual family’s needs. He or she can help walk you through these conversations.
kirk stange, founding partner, stange law firm pc
A couple of estate-planning options for those entering into a second marriage are prenuptial agreements and—in states that allow them—Domestic Asset Protection Trusts (DAPTs). The first is a contract signed by the parties prior to marriage that denotes how property and debt will be divided upon divorce. However, a prenuptial agreement also can work hand-in-hand with an estate plan and effectively deal with inheritance issues, including the potential waiver of the right of a spouse to receive an elective share.
A DAPT often can be set up at any time, including after the parties have married. This is beneficial to those who may not be able to think about the ramifications of divorce at the outset, but after a number of years, might be in a different frame of mind regarding the marriage or the potential longevity of the relationship.
It may be even more beneficial for individuals to have both agreements. Using these asset protection tools in combination may be the best way for some to protect assets. However, it is critical to talk to an attorney about any individual situation.
Note: The choice of a lawyer is an important decision and should not be based solely upon advertisements. Kirk C. Stange is responsible for this content.